Q1 Results
Year 2009/10
1Agenda

1. LEM at a Glance
2. Business Review
3. Recession Management
4. Financial Review
5. Outlook2

1. About LEM•

LEM is the global market leader in providing innovative and high quality
solutions for measuring electrical parameters•

The current and voltage transducers are used in a broad range of applicationsin industrial, traction, energy & automation and automotive markets•

LEM is a high growth global company with approximately 900 employees
Production plants are in Geneva (Switzerland), Copenhagen (Denmark),Machida (Japan), Beijing (China) and regional sales offices close to the clientslocations•LEM is listed on the SWX Swiss Exchange since 1986
Market cap of CHF 287 million
36 August 2009

1. LEM Production & Logistics World-Wide4
6 August 2009

1. LEM at a Glance - Markets served
Traditional Markets•

Industry

New Markets•– Battery Management in
SUV, HEV– Motor Control– All areas of reliable current
measurement– Motor drives, power
conversion AC/DC, power
supplies, UPS, welding,
medical scanners, newenergies, leakage current, test& measurement••Traction & Trackside– on-board applications,inverters– Trackside and energy
monitoring

6 August 2009

AutomotiveEnergy & Automation– Process control– Battery Monitoring,
Energy Metering52. Business Review

2. Highlights YTD Q1 2009/10• After 3 quarters of negative book to bill, a positive book to bill ratio inQ1 2009/10• Sales decreased to CHF 35.6 million, -36% to the prior year and-12% to prior quarter• Gross margin improved to 42.4% versus 39.7% in prior quarter• Operational EBIT of CHF 3.2 million, or 8.9% of sales• Net earnings decreased to CHF -1.3 million due to the provisions forthe stock option plans (CHF 4.3 million)• First signs of recovery in all 4 markets• Acquisition of LEM Danfysik with new focus on high precision Industryapplications
76 August 2009

2. Net Sales

CHF Millions

CHF millions

Sales

GrowthQ1 to Q1

GrowthQ1 to Q4

Total Sales

35.6-35.8%-12.3%

Industrial

32.9-35.8%-13.8%

Automotive

2.8-35.3%

10.3%

20016012080400
2003/04
6 August 20092004/05

2005/06

2006/07

2007/08

2008/09

Q1
2009/108

2. Industrial Segment: regional markets
ROW 1%

Asia 29%

N. America
13%

Sales
growth rates

Q1 to Q1

Q1 to Q4

Europe-40.4%-18.0%

N. America-31.4%-25.8%

Asia-24.5%-4.2%

ROW-58.8%-19.1%

Total-35.8%-13.8%

Europe 57%

Total sales CHF 32.9 million for Q1 2009/10
96 August 2009

2. Industrial Segment: business development
CHF millions

Op. EBIT in % of sales

200

25Market and Applications

160

20

This quarter each market was impacted
by the recession:
Industry: declined by 39.8 - speciallyin the areas of robotics and welding

120

1580

1040

500
2004/05

6 August 20092005/06

2006/07

2007/08

2008/09

Q1 2009/10

Traction: decreased by 17.3% due todecline in Russian business and somefreight train project cancellations
Energy & Automation: decreased by
51.3% still from a small basis mainly due
to the government subsidized projects
for solar and wind10

2. Automotive Segment: regional markets
Europe 10%

Asia 42%

Sales
growth rates

Q1 to Q1

Q1 to Q4

Europe-17.0%-2.5%

N. America-40.2%-10.3%

Asia-34.2%

51.1%

Total

-35.9%

9.2%

N. America
47%

Total sales CHF 2.8 million for YTD Q1 2009/10
116 August 2009

2. Automotive Segment: business development
CHF millions

Op. EBIT in % of sales
2025Market
20151510105• Further decline in productionof US platforms• Substantial increase to Asiancustomers• Design-in obtained for several BMGTand hybrid projects

500
2004/05 2005/06 2006/07 2007/08 2008/09

Q1
2009/10

Applications-5-5-10-10• Battery management also for HEVs
• Motor Controls• New starts of production later in 200912-15

6 August 2009-15

2. Business Development – Results for Industry
MarketNew Business> CHF 0.5 millionRegion

SoP
2009/10

Photovoltaic, Wind

China

Q1

Photovoltaic

Japan

Q4

Photovoltaic, Drives

Germany

Q3, Q4Wind

Scandinavia

Q4Drives, Air conditioning

Scandinavia

Q4

Photovoltaic, Wind

Spain

Drives, Air conditioning

N. America

SoP
2010/11Q1Q4
13

6 August 2009

2. Business Development – Results for Automotive
MarketNew Business> CHF 0.5 million

Applicationin volume

SoP
SoP
2009/10 2010/11

China

BM, EV, HEVx

Japan

EV, HEV

Q1

Japan

BM

Q4

JapanBM

Japan

EPS

Korea

EV, HEVEurope

BMEurope

EV, HEVUSA

EV, HEV, BMx

Global F1BMx

Q2
Q2
Q2x
Q1xQ3
Q4Q1, Q2

Q4

EV = electric vehicle, HEV = hybrid electric vehicle, BM = battery management, EPS = Electric Power Steering
6 August 200914

2. Business Development - China
Production• Continued transfer of key products• “Made by LEM” quality• Productioncommenced in new leased
60
building in July 2009

Sales
• Sales growth -7.3%• Market share now over 40%

20

CHF Millions

CHF Millions
5040
1530
1020

510002/03 03/04 04/05 05/06 06/07 07/08 08/09

002/0303/04

6 August 2009

04/05

05/06

06/07

07/08

08/09

Q1 09/10

Q109/10153. Recession Management163. Recession Management - Q1 was profitable

CHF millions

Q1 2008/09

Q2 2008/09

Ordersreceived

58.1

53.3

39.2

34.4

36.4

Sales

55.5

55.5

45.1

40.7

35.6

Operational

12.0

9.4

4.1

3.7

3.2

Q3 2008/09 Q4 2008/09 Q1 2009/10

EBIT Strict cost reductions of production and overhead costs, implemented sinceQ3 2008/09, assured a +8.9% ROS in Q1 2009/10
176 August 2009

4. Financial Review

4. Income Statement
TCHF

Q12008/09

Q42008/09

Q1
2009/10Sales

55’49440’66735’644Gross margin %47.539.7

42.4

SG&A

(14’357)(12’363)(11’933)

Operational EBIT*

11’982

3’776

3’187

EBIT

9’649

3’438

(1’125)

Financial expense
(net)

652

332

(233)

Income taxes(2’956)(1’406)71

Net earnings

7’345

2’365

(1’286)

 Share price development from CHF 149.90 to CHF 250.00 resulted in an additional provision of CHF 4.3 million* Before revaluation of provisions for the stock option plans
6 August 200919

4. Gross margin development
CHF millions

GM % of sales

90% Continued transfer of productionto China
 Rightsizing of capacities

9075%75

 Improvement of gross margincompared to Q3 and Q4 2008/09

60%
6045%
4530%

30
1515%00%
2004/05 2005/06 2006/07 2007/08 2008/09
6 August 2009

Q1
2009/1020

4. Operational EBIT development
after change in conditions of the SOP
CHF millions

Op. EBIT % of sales

25%

35

 Operational EBIT of 8.9% of sales

3020%

25
2015%
151010%50
2004/05

2005/06

2006/07

2007/08

2008/09 Q1 2009/10

5%‐5210%‐10
6 August 2009

4. Net earnings
after change in conditions of the SOP
CHF millions% of sales Negative effect of revaluationof cash settled stock option planof CHF 4.3 million
15%
2010%

15105%
50%
0
2004/05

2005/06

2006/07

2007/08

2008/09

Q1 2009/10

22
‐5‐5%
6 August 2009

5. Outlook

5. Market Factors and Strategy

The present recession challenges our growth strategy:– Weakness in important Industry market– Very weak market situation in Automotive– Weakness in energy savings and renewable energy
We firmly believe in our Strategic Direction• The underlying market trends continue to providetailwind• Our multi-market and global reach are clear benefits
24
6 August 2009

5. Outlook
Our fast and firm reaction to the recession will enable us to be stronger
coming out of the downturn.
• We will maintain our focus on cost control and operational priorities• We will continue our investments in the new businesses, including thefast integration of LEM Danfysik• We believe that the market downturn has bottomed out• All 4 markets show first signs of a recovery• Region Asia outperforms Europe and Nafta
At this time we can not judge the timing and extent of the upturn25
6 August 2009

5. Financial Calendar and Contact Details
Financial calendar

6 August
5 November
9 February
3 June200920092010
2010

For further information
Paul Van Iseghem
President and CEO
Tel.: +41 22 706 14 09
E-mail: pvi@lem.com

Q1 2009/10 results
Q2 2009/10 results
Q3 2009/10 results
Full year 2009/10 results

Heinz Stübi
CFO
Tel: +41 22 706 12 30
Email: hst@lem.com

26
6 August 2009